CDW Corporation

CDW reported second-quarter 2026 net sales of $6.6 billion, up 10% year over year, gross profit of $1.3 billion, up 6.3%, non-GAAP operating income of $556 million, up 7%, and non-GAAP earnings per diluted share of $2.91, up 11.9%. Gross margin was 20.1%, down 70 basis points year over year. Net income was $370 million, up 7.8%. For the full year 2026, CDW now expects gross profit to grow mid-single digits and non-GAAP EPS to grow at the high end of the high single-digit range year over year; it also expects the U.S. IT addressable market to grow in the mid-single digits with 200 to 300 basis points of CDW outperformance. For third quarter 2026, management expects gross profit to increase at a mid-single-digit rate and non-GAAP EPS to grow at the high end of the high single-digit range year over year. Management said full-year gross margin should be modestly below 2025, with second-half gross margins below second-half 2025 levels.

Chris Leahy said the quarter showed CDW’s relevance in a more complex technology environment, with AI increasing demand for CDW’s full-stack, full-life-cycle model rather than replacing it. She emphasized that AI adoption is broadening from large enterprise into healthcare, education, commercial, and smaller businesses, and that CDW is turning proven use cases into repeatable offerings. Her tone was confident and upbeat, but measured, with repeated emphasis on durable demand, customer urgency, and the company’s role in helping customers translate AI investments into outcomes.

Al Miralles highlighted gross profit of $1.3 billion, up 6.3%, gross margin of 20.1% and non-GAAP operating income of $556 million with margin of 8.5%. He said SG&A was $764 million, or 57.9% of gross profit, and noted this was down 20 basis points year over year as efficiency improved. He also pointed to net debt of $5.5 billion, liquidity of $2 billion, a 21-day cash conversion cycle, and adjusted free cash flow of $278 million year to date, below the company’s 80% to 90% conversion rule of thumb because of a roughly $400 million inventory increase. Capital returns included $344 million of share repurchases and $80 million of dividends in the quarter, with more than $1.1 billion of buyback capacity remaining.

Analysts focused on AI monetization, margin pressure from large infrastructure deals, pricing behavior, services attach, and cash flow conversion. Management said AI is already embedded across hardware, software, implementation, and services, and that customers are moving from pilot to implementation while demanding more ROI analysis. On margins, the company said there was no like-for-like pricing pressure; the main issue was mix into larger infrastructure orders and less services contribution. On services timing, management said demand is delayed by deployment timing and should pick up as customers move from procurement to implementation, with visibility improving into the back half of the year. On cash flow, management said inventory and working capital investment drove the shortfall, but expects normalization later in the year.